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The magic of the new economic theory: the prisoner's dilemma

" Microeconomics traditional purpose was to give substance to the intuition that the functioning of competitive markets could be effective. Game theory emphasizes instead the importance of coordination defects inherent in decentralized decisions [ Cahuc P; The new microeconomics Collection Insights, Discovery, 1993 23].

That summarizes the change made by the "new economy" in recent years - as it defines itself - while it is the centralized organizations that have gone bankrupt in the East and are in crisis in the country the welfare state.
But the new economists can not stop this kind of detail. They toil, On the contrary, to demonstrate that the decentralized decisions can not be "optimal". Such decisions are probably not optimal (and they never will), but they have the merit to exist. It is a major feature, for the optimal decisions, they do not exist.
The function of the market is to force players to make choices, to make decisions. And functioning of the economy thrives these choices. The new economists have not yet integrated the idea that nothing is optimal in this world ... A scientific mind is the duty interest in what exists, and what exists is necessarily imperfect. What is the usefulness of a model that describes an imaginary world but optimal.

The contemporary microeconomic models assume that we are all, to our knowledge, such as "prisoner" of a narrow selfishness that prevents us from making decisions that a "benevolent agent" would then be entitled and need to take our place . Is to destroy the "parable of the invisible hand proposed by Adam Smith as the prisoner's dilemma was developed by economists contemporaries.
recall the principle of "prisoner's dilemma . Two prisoners are accused of committing a crime together and are interviewed separately. The police officer makes them the following proposition: " if you keep silent and if your accomplice confesses, you will do five years in prison. If you admit both, you'll only three years. It is possible that your accomplice remains silent. If you're quiet, too, may thou be one year in prison. However, if your accomplice does not say anything and if you confess, you will be let out in three months. You see if your accomplice confesses, you'd better confess, and if your accomplice remains silent, you still have interest to confess. So why not admit it now? .

It appears that if each prisoner pursues his personal interest, it's interest to confess. For keeping silent, he takes the risk to remain five years in prison. But admit it is not in the best interests of both prisoners admitting both, they will make three years in prison, so that if they had remained silent both, they would take a year imprisonment.
This parable is interpreted in a special meaning, especially showing that private interest is not the best guide for our decisions when these lead to results contrary to the public interest. Thus, this principle serves as a pretext to a theoretical fundamental questioning of decisions decentralized operating in any market process. New
economists believe they have found the magic formula that allows them to assert that the "invisible hand" of Adam Smith does not exist.

Not to mention the fact that it is in the general interest of criminals, whose guilt is established, all remain in prison, we see from this example that one does not define general interest. It merely, at most, be confused with a "common interest ", namely the interest of criminals. But the interest of criminals is, in fact, a corporatist interest which has little to do with the general interest (and in the case of criminals, it is even contrary to public interest). More generally, the interest of a corporation whatsoever has ever been the general interest. Greater interest corporatist most often leads to the breakdown of social cohesion rather than its fulfillment .

But since the new building economists fun stories to reach their conclusions, let me tell you another story. What would happen if our prisoners were Bonnie and Clyde, madly in love with each other?
love for his partner, Bonnie would prefer to withdraw to save while Clyde Clyde would act the same way to save Bonnie. Finally, our two robbers would be engaging all the same to the authorities by denouncing each other. Does this mean that love is not a sense "optimal" because it leads to decisions that will be harmful to our two protagonists? In this case, altruism is not optimal. And how the State will claim he correct this "failure"? It had been better to be selfish.

Thus, the "Prisoner's Dilemma" tells us nothing other that is already known: it can be dangerous to think only of itself as it can be suicidal thinking only of others.

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crisis

In Orwell's novel 1984, the dictator (Big Brother) unfolds terrifying instruments of social control, particularly in Assen length of time on the airwaves as the country's borders are at war. This atmosphere of war gives him the ability to keep the population in a state of constant fear conducive to the installation of a totalitarian society. Then the population has no choice but to turn to the protection of "benevolent" a state that cares for at the same time the final gag.

Fortunately, we do not yet live in such a world and it's not deny reality economic crisis. However, continuing its media plays a similar role. I studied economics in the 80s. During all my years of study, my teachers always spoke of the crisis ... And this has not stopped since. Listen to sketches of Coluche: Crisis! President Giscard d'Estaing, who sees the end of the tunnel in 1979. Mitterrand nationalized the banking system, already undergone all the demonization, to conduct an industrial policy that would get us out of the crisis. Finally, unemployment explodes and right returns to power to end the crisis ... The Governments come, but the crisis is still there.
Generally, the political stars captured the theme of crisis often s'étriper them especially during election campaigns, often to explain. Do they have interest in explaining the crisis? Did they reduce the interest in crisis? See how the Irish "no" to Europe is about to vote "yes" now being hit by the crisis.
For all potential victims of the crisis are turning to the state, and therefore to politicians who welcome the return of political economic life as if they had the tools of interventions of proven efficacy? This situation is however likely to keep us in a state of permanent crisis.

researcher in economics that I'm trying to understand the economy as an object, trying to find logical relationships and sequences relentless cause and effect, apart from any consideration personal or corporate, even if there is intense debate (and chapels) among economists. But it is the nature of science because it is through debate that knowledge progresses despite everything. The economist is not liked because it often contains things that we all know but nobody wants to hear.

The fact is that the economy can not be permanently in crisis even if there is a logical discourse permanent crisis. The leading experts of the IMF or INSEE can not predict the outcome of the ongoing crisis. The IMF forecasts are adjusted regularly, sometimes lowered, now revised upwards. Economists are like political analysts: they are always erudite and sophisticated explanations to be given after that phenomena have occurred. Not that the experts are incompetent but the functioning of the economy is at least as complex as the climate and it is this complexity that makes economic phenomena often unpredictable if not mysterious (and the weather are difficult to predict beyond five days).
knowledge of the movement of the stars does not change the trajectories. By cons, knowledge of economic phenomena certainly alters their course. This is what economists refer to as "self-fulfilling expectations." Imagine that households have more confidence in the banking system, fearing a bank fails. Then they rush to stop to remove their assets, thus causing the unfortunate event dreaded and vindicating their decision. Thus, the provision of a crisis can be a trigger for a crisis. On the other hand, being afraid of a crisis can prevent it too. Everyone has compared the current financial crisis to the crisis of 1929. Yet the widespread collapse of 1929 did not happen. If it has not (yet) product, is through the coordinated action of monetary authorities All major countries have reacted to avoid the worst, or is it because we were wrong in making such a comparison?

Basically, we have no way of knowing which is both frustrating to the researcher, for citizens and for those who have political responsibilities at the highest level.

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About Guidance

In this period the bachelor, I would like to provide some policy advice to my students, students in general and prospective students. These tips are based on my field experience and my intuition. And I say to my students I tell my own children, without any jargon.
Without making crude demagoguery, I consider that there are no bad students per se, but there are too many students confused and therefore misguided. And when you're not in the right track, that is to say the one that suits your aspirations and not always conscious, you can not get good results because we do not take any pleasure in study.

first observation. More and more students remain at school after graduating to a BTS. The BTS is very good training. These are short courses designed to integration into working faster. From this point of view, they are very effective. But be careful not to distract them from their goals. In fact, many owners wish to register BTS third year of university (L3). On the one hand, the L3 is the end of a university consists of L1 and L2. It's trivial but worth mentioning that the programs are designed to L3 according to what students have seen in L1 and L2. Experience shows that with a BTS, even among the best, have difficulty following directly in L3. Moreover, the BTS is issued by secondary teachers in secondary schools. We can not be considered a university degree.
For cons, the students who receive a general baccalaureate with honors and have therefore a high intellectual potential should enroll in the first year in university education.
Moreover, in these times of crisis and change, organizations are placing increasing emphasis on self-reliance, taking responsibility and initiative of their employees . If it is a place where autonomy is daily put to the test, it is at university. It true that autonomy is frightening to young (and not only young ...) and that is why they turn to larger schools or BTS where they will be closely supervised.
Yet for those who want to reach senior positions, much to rub the earliest possible autonomy. This issue must really intervene in the choice of fuels. If

professionalization has become an imperative, be aware that it is not always necessary to professionalize too fast or too soon. Again, it is all about industry and goals. If some people have nothing to do at university, others may find their way. It is just as damaging to bind a student who has academic potential in a sector that BTS to send the university a student who has a profile of a technician.
A student who wins a traditional license (in arts, law, economics and science) may well succeed in his professional master pro provided to choose a master pro in making the labor market. Today's offer master pro is considerable [see guide LAMY 2009-17 edition] and it is better to be annoyed by the choice is that the lack of choice.

Finally, never forget that the candidate who makes the value - and reputation - a diploma and not the reverse. If you have excellent results in your studies, then you are in the pipeline that suits you (you've found your way!) So keep as far away as possible. If unfortunately, your results are not up to your expectations, you must refocus. But the purpose is not to earn diplomas. It is not necessarily okay to earn two masters on his CV.